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Poster: dead-head_Monte Date: Nov 5, 2011 9:03am
Forum: occupywallstreet Subject: Why is the FBI not prosecuting Goldman Sachs?

Why is the FBI not prosecuting Goldman Sachs?


How Goldman Sachs secretly bet on the U.S. housing crash
By Greg Gordon | McClatchy Newspapers | Posted on Sunday, November 1, 2009
Read the full article on McClatchy's web site

WASHINGTON — In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.

Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies.

Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk.

Now, pension funds, insurance companies, labor unions and foreign financial institutions that bought those dicey mortgage securities are facing large losses, and a five-month McClatchy investigation has found that Goldman's failure to disclose that it made secret, exotic bets on an imminent housing crash may have violated securities laws.

"The Securities and Exchange Commission should be very interested in any financial company that secretly decides a financial product is a loser and then goes out and actively markets that product or very similar products to unsuspecting customers without disclosing its true opinion," said Laurence Kotlikoff, a Boston University economics professor who's proposed a massive overhaul of the nation's banks. "This is fraud and should be prosecuted."

Lloyd Blankfein, Goldman's chairman and chief executive, declined to be interviewed for this article.

To piece together Goldman's role in the subprime meltdown, McClatchy reviewed hundreds of documents, SEC filings, copies of secret investment circulars, lawsuits and interviewed numerous people familiar with the firm's activities.

McClatchy's inquiry found that Goldman Sachs:

• Bought and converted into high-yield bonds tens of thousands of mortgages from subprime lenders that became the subjects of FBI investigations into whether they'd misled borrowers or exaggerated applicants' incomes to justify making hefty loans.

• Used offshore tax havens to shuffle its mortgage-backed securities to institutions worldwide, including European and Asian banks, often in secret deals run through the Cayman Islands, a British territory in the Caribbean that companies use to bypass U.S. disclosure requirements.

• Has dispatched lawyers across the country to repossess homes from bankrupt or financially struggling individuals, many of whom lacked sufficient credit or income but got subprime mortgages anyway because Wall Street made it easy for them to qualify.

• Was buoyed last fall by key federal bailout decisions, at least two of which involved then-Treasury Secretary Henry Paulson, a former Goldman chief executive whose staff at Treasury included several other Goldman alumni.
Read the full article on McClatchy's web site

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Poster: dead-head_Monte Date: Nov 5, 2011 11:38am
Forum: occupywallstreet Subject: Re: not prosecuting Wall Street - Nobody goes to Jail!


• February 22, 2011 - Matt Taibbi's entire interview: 'Why Isn't Wall Street in Jail?’

matt-taibbi.jpg"Nobody goes to jail,” writes Matt Taibbi in his issue of Rolling Stone magazine. “This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth." Taibbi explains how the American people have been defrauded by Wall Street investors and how the financial crisis is connected to the situations in states such as Wisconsin and Ohio. The broad crime in all of this was just fraud. These banks were taking these subprime mortgages, and they would have these billion-dollar pools of mortgages where, in some cases, 70 or 80 percent of the loans were to people who had no identification or no jobs or who had put no money down into the mortgage. And then they were taking these loans and applying this phony baloney, hocus pocus math, these derivative instruments, and turning them into AAA-rated investments. And they were marketing, again, these securities to, say, state pension funds as AAA-rated investments, which means credit risk almost zero.

So they took the stuff that they knew was very, very risky and very, very likely to default, and they were going to the state of Wisconsin, the state of Ohio, the state of New York, and saying, "Hey, this is almost as safe as — or in fact, it is as safe as United States Treasury bonds. You should buy this, and you’ll earn a little bit more than you’ll earn if you buy T-bills." The reality was, they were just taking absolutely worthless stuff and sticking it with these people and then fleeing the scene.

• February 22, 2011 - Matt Taibbi's entire interview: 'Why Isn't Wall Street in Jail?’

Democracy Now archives - search for Matt Taibbi

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Poster: rastamon Date: Nov 5, 2011 11:48am
Forum: occupywallstreet Subject: Re: not prosecuting Wall Street - Nobody goes to Jail!

Also the politicians who aided deregulation by letting people who had bad credit get home loans, just to garner votes. The democrat's and republican's who supported and who's elections were paid for by Wall Street Greed mongers. If they didn't break any "Laws" because of loopholes, then vote the bums OUT!

Show me a list of democrat's who accepted Wall Street $$ for election and senate votes. I sure as hell know you can point out the republicans...I want to see some fair handedness on who's really to blame.

Some of the people that took advantage of loose credit restrictions to get into their own mess should shoulder some blame too. They are not all victims, some lacked basic common sense by living in the red on so many credit levels.

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Poster: NoiseCollector Date: Nov 8, 2011 7:26am
Forum: occupywallstreet Subject: Re: not prosecuting Wall Street - Nobody goes to Jail!

Hey man, as you are probably aware, trying to reason with people about this stuff is pointless. I am supposed to be avoiding stress and I even let 2 liberals at work chirping the most illogical rationalizations that I have heard yet and I didn't bother chiming in... it's pointless. It's all pointless. Now that the left has the scarlet letter on cain they don't have to vote AGAINST a black person so the election is sealed for 0bama in 2012. I almost think the republicans are doing this on purpose, maybe they are getting payola somehow? If a third party candidate does not come out, it's all over.

Today's vote in Ohio will set the ball rolling and this country will never recover. It's time to go from debating mode to survivalist mode because by the next election after 2012 all the illegal aliens will be registered democrats, many of the old white people that vote will be gone, and we will never see another majority besides the uber left wing democrats in power. All we can do is move away from the urban areas, teach our children to hunt and fish, and hope we have enough canned goods and time to grow a crop or learn to gut a dear. I give western civ 20 years max before it's mad maxville.

See you on the other side of civilization!

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Poster: rastamon Date: Nov 5, 2011 12:09pm
Forum: occupywallstreet Subject: Re: not prosecuting Wall Street - Nobody goes to Jail!

I noticed a few "Why not's" above. WHY is Obama NOT ordering the FBI and Attorney General to prosecute them, regardless of political party? WHY NOT?? I'll tell you why not, because there are too many corrupt partisan fucks out there, hooked on greed, power and not representing We the People. I'll say this for We the People >> "big corrupt government, Don't tread on me!" that's something we could all agree on!

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Poster: NoiseCollector Date: Nov 7, 2011 8:41am
Forum: occupywallstreet Subject: Re: not prosecuting Wall Street - Nobody goes to Jail!

I heard a rumor that Fannie and Freddie are getting some big bonuses... mums the word on them though, right?

Did you know if you took ALL the income from the "1%" it still would not be enough to pay all the wasteful crap our government funds?

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Poster: Arbuthnot Date: Nov 5, 2011 1:26pm
Forum: occupywallstreet Subject: Re: Jail 'em all

on the let's jail everyone theme, why isn't the CEO and other bigs of companies like Coke/Pepsi and Big Foods, Inc. not in jail for poisoning the population with pesticides, carcinogens, and other toxic ingredients, and being the prime reason for sky-rocketing health care, obesity, diabetes, kidney failure, heart disease, cancer, etc.? these are known killers, and yet where is the outcry, where are the sit-ins and occupying forces rallying against these corporate giants of ill-health?

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Poster: NoiseCollector Date: Nov 7, 2011 8:43am
Forum: occupywallstreet Subject: Re: Let them eat cake

Break out the guillotines for fannie mae and freddie mac too! And GE... oh wait.... nevermind. WE LIKE THOSE ROBBER BARONS.

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Poster: dead-head_Monte Date: Nov 5, 2011 10:29am
Forum: occupywallstreet Subject: Re: Why is the FBI not prosecuting the Ratings Agencies?

Moodys, Fitch, Standard & Poors


Why is the FBI not prosecuting the Ratings Agencies?

How Moody's sold its ratings - and sold out investors
By Kevin G. Hall | McClatchy Newspapers | Posted on Sunday, October 18, 2009
Read the full article on McClatchy's web site

WASHINGTON — As the housing market collapsed in late 2007, Moody's Investors Service, whose investment ratings were widely trusted, responded by purging analysts and executives who warned of trouble and promoting those who helped Wall Street plunge the country into its worst financial crisis since the Great Depression.

A McClatchy investigation has found that Moody's punished executives who questioned why the company was risking its reputation by putting its profits ahead of providing trustworthy ratings for investment offerings.

Instead, Moody's promoted executives who headed its "structured finance" division, which assisted Wall Street in packaging loans into securities for sale to investors. It also stacked its compliance department with the people who awarded the highest ratings to pools of mortgages that soon were downgraded to junk. Such products have another name now: "toxic assets."

As Congress tackles the broadest proposed overhaul of financial regulation since the 1930s, however, lawmakers still aren't fully aware of what went wrong at the bond rating agencies, and so they may fail to address misaligned incentives such as granting stock options to mid-level employees, which can be an incentive to issue positive ratings rather than honest ones.

The Securities and Exchange Commission issued a blistering report on how profit motives had undermined the integrity of ratings at Moody's and its main competitors, Fitch Ratings and Standard & Poor's, in July 2008, but the full extent of Moody's internal strife never has been publicly revealed.

Moody's, which rates McClatchy's debt and assigns it quite low value, disputes every allegation against it. "Moody's has rigorous standards in place to protect the integrity of ratings from commercial considerations," said Michael Adler, Moody's vice president for corporate communications, in an e-mail response to McClatchy.

Insiders, however, say that wasn't true before the financial meltdown.

"The story at Moody's doesn't start in 2007; it starts in 2000," said Mark Froeba, a Harvard-educated lawyer and senior vice president who joined Moody's structured finance group in 1997.

"This was a systematic and aggressive strategy to replace a culture that was very conservative, an accuracy-and-quality oriented (culture), a getting-the-rating-right kind of culture, with a culture that was supposed to be 'business-friendly,' but was consistently less likely to assign a rating that was tougher than our competitors," Froeba said.

After Froeba and others raised concerns that the methodology Moody's was using to rate investment offerings allowed the firm's profit interests to trump honest ratings, he and nine other outspoken critics in his group were "downsized" in December 2007.

From late 2006 through early last year, however, the housing market unraveled, poisoning first mortgage finance, then global finance. More than 60 percent of the bonds backed by mortgages have had their ratings downgraded.

"How on earth could a bond issue be AAA one day and junk the next unless something spectacularly stupid has taken place? But maybe it was something spectacularly dishonest, like taking that colossal amount of fees in return for doing what Lehman and the rest wanted."

Ratings agencies thrived on the profits that came from giving the investment banks what they wanted, and investors worldwide gorged themselves on bonds backed by U.S. car loans, credit card debt, student loans and, especially, mortgages.

Before granting AAA ratings to bonds that pension funds, university endowments and other institutional investors trusted, the ratings agencies didn't bother to scrutinize the loans that were being pooled into the bonds. Instead, they relied on malleable mathematical models that proved worthless. (In others words, They Lied! Collusion? Conspiracy? Lying to Congress?)

"Everyone else goes out and does factual verification or due diligence. The credit rating agencies state that they are just assuming the facts that they are given," said John Coffee, a finance expert at Columbia University. "This system will not get fixed until someone credible does the necessary due diligence."

Nobody cared about due diligence so long as the money kept pouring in during the housing boom. Moody's stock peaked in February 2007 at more than $72 a share.

Billionaire investor Warren Buffett's firm Berkshire Hathaway owned 15 percent of Moody's stock by the end of 2001, company reports show. That stake, largely still intact, meant that the Oracle from Omaha reaped huge financial rewards while Moody's overlooked the glaring problems in pools of subprime mortgages.

A Berkshire spokeswoman had no comment.

One Moody's executive who soared through the ranks during the boom years was Brian Clarkson, the guru of structured finance. He was promoted to company president just as the bottom fell out of the housing market.

Several former Moody's executives said he made subordinates fear they'd be fired if they didn't issue ratings that matched competitors' and helped preserve Moody's market share.
Read the full article on McClatchy's web site

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Poster: NoiseCollector Date: Nov 7, 2011 8:40am
Forum: occupywallstreet Subject: Re: Why is the FBI not prosecuting the Ratings Agencies?

barney frank

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Poster: NoiseCollector Date: Nov 7, 2011 8:40am
Forum: occupywallstreet Subject: Re: Why is the FBI not prosecuting Goldman Sachs?

Because of Corzine and 0bama